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VerenaStuetz
Advisor
Advisor
When you set up your SAP S/4HANA Cloud system for the first time, there's a number of decisions you need to make regarding the settings that'll be valid for the whole system.

Among other things, you're deciding how many and which ledgers you're going to use. This is a big decision that depends on your business environment and whether your company is operating on a national or international level, for example.

The ledger is one of the core entities in the system. It combines many of the settings that are critical for accounting. A standard ledger has the following key characteristics:

  • It's based on the Universal Journal and is the central repository for accounting data.

  • It's the entity that records all business transactions and includes the corresponding general ledger accounts.

  • It contains other critical settings that are relevant for a company code using this ledger, such as currencies and accounting standards.

  • And you can use additional standard ledgers for parallel accounting. This is useful when, for example, you need to do your financial reporting according to different sets of accounting standards, such as IFRS and US GAAP.


Based on your company's requirements, you make the ledger-specific settings in the initial scoping phase by selecting the relevant scenarios.

Here are the ledger scenarios and combinations that are available to you:

  1. Scenario J58: One standard ledger that covers your local accounting standard:





    • Ledger 0L (leading ledger): This ledger is always included in your scope and can't be removed.





  1. Scenarios J58 + 1GA: Two parallel standard ledgers to allow you to use one local and one corporate accounting standard (IFRS) in parallel:





    • Ledger 0L (leading ledger): The local accounting standard is assigned to this ledger by default.

    • Ledger 2L (non-leading ledger): The corporate accounting standard IFRS is assigned to this ledger by default.





  1. Scenarios J58 + 2VA: Two parallel standard ledgers to fulfill the business need to use one local and one corporate accounting standard (US-GAAP) in parallel:





    • Ledger 0L (leading ledger): The local accounting standard is assigned to this ledger by default.

    • Ledger 3L (non-leading ledger): The corporate accounting standard US GAAP is assigned to this ledger by default.




For the parallel accounting options described above (that is, options 2. and 3.), we recommend that you change the default assignments as follows: Assign ledger 0L to the corporate accounting standard and ledgers 2L and/or 3L to the local accounting standard.

  1. Scenarios J58 + 1GA + 2VA: Three parallel standard ledgers to cover you when you need to use a local and two corporate accounting standards (IFRS and US GAAP) in parallel:





    • Ledger 0L (leading ledger): The local accounting standard is assigned to this ledger by default.

    • Ledger 2L (non-leading ledger): The corporate accounting standard IFRS is assigned to this ledger by default.

    • Ledger 3L (non-leading ledger): The corporate accounting standard US GAAP is assigned to this ledger by default.





Figure 1: Available combinations of ledgers and accounting standards included in the scenarios delivered by SAP


Please note that this is the default assignment defined in the scoping phase. You can assign any of the available accounting standards (that is, IFRS, USGP and all local accounting standards of the countries that are in your scope) to the relevant ledgers before making the first posting in your system.

As stated above, we recommend that you use the leading ledger with a corporate accounting standard on ledger level, and one of the non-leading ledgers for the local accounting standard.

Things to keep in mind

What's important to know is that for each ledger that's activated in your system, additional steps are required during the monthly or annual closing activities. The system performs all closing activities, such as settlement, depreciation, or allocation, by ledger.

So you should consider this before making your decision in order to avoid unnecessary data redundancies and not to strain your system performance with ledgers your company doesn't need for its business.

On the other hand, if you know that your company is going to expand its business to another country in the future, it could make sense to activate the relevant scenario already.

Either way, please remember that once you complete the initial scoping of your ledgers, the activation setup can't be reversed. Once you have it, you have it, but you retain the option to change the default assignments of your ledgers to different accounting standards if you need to.

So, for example, let's say your business requirements, such as parallel accounting, call for a change of the assignment of accounting standards to your ledger. You can change this assignment before making the first posting in your system. This means, that you can, for example, assign the leading ledger 0L to your corporate accounting standard (for example, IFRS), and assign your non-leading ledger 2L to your local accounting standard (for example, DEAP).

Just keep in mind that the accounting standards delivered by SAP are predefined and cannot be changed.

Want to learn more?

Find more information about ledger combinations and their dependencies on the SAP Help Portal:
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